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Business News/ Companies / People/  Toyota names Lexus chief its new CEO as car industry faces historic shift

Toyota names Lexus chief its new CEO as car industry faces historic shift

Toyota Motor Corp made Lexus President Koji Sato chief executive officer, replacing the long-serving Akio Toyoda

Toyota Motor Corp Chief Executive Akio Toyoda (AP)Premium
Toyota Motor Corp Chief Executive Akio Toyoda (AP)

Toyota Motor Corp. made Lexus President Koji Sato chief executive officer, replacing the long-serving Akio Toyoda as the the world’s biggest carmaker navigates the auto industry’s once-in-a-generation shift toward electrification and greater automation.

Toyoda, grandson of the Japanese car giant’s founder, become’s chairman effective April 1, the company said in a statement Thursday. He became CEO more than a decade ago and oversaw the Toyota’s rise to become the world’s No. 1 maker of cars.

Sato, 53, takes on leadership of Toyota at a watershed moment. The carmaker is facing criticism for its reluctance to plow headlong into electric vehicles, instead spreading its bets across various technologies such as battery-based EVs, hybrid technology, hydrogen-powered cars and traditional combustion vehicles.

“I’m an engineer and have devoted myself to carmaking, and I will continue to do that as CEO," Sato said in an online briefing.

Sato was appointed chief branding officer at Toyota in January 2021, according to the carmaker’s website. After graduating from Waseda University with a bachelor’s degree in mechanical engineering in March 1992, he joined Toyota in April of the same year.

In early 2016, Sato was appointed chief engineer of Lexus International Co., and in April the following year, ascended to chief of Toyota’s luxury arm. In September 2020, Sato was also appointed president of Gazoo Racing, its motorsport and performance road car brand.

Sato’s appointment, and Toyoda making way, sends a clear message, said Mitsushige Akino, an analyst at Ichiyoshi Asset Management Co.

“The social and economic environment has become more volatile, and by becoming chairman, Akio Toyoda will be able to take a broader view of management," he said. “Stronger management will be good for Toyota. By appointing Sato, who isn’t a senior officer, as CEO, the message is that younger people should take over."

The shift Toyoda is making isn’t unprecedented. At 66, he will be moving into the chairman’s role at around the same age as past CEOs of the carmaker, which tends to closely follow historical precedent. Katsuaki Watanabe ceded the role at 67. Before him, Fujio Cho left the position at 68, and Hiroshi Okuda at 66.

Takeshi Uchiyamada, the current chairman, will step down.

Toyoda was eyeing successors

Toyoda is the second-longest tenured head of a major auto company, according to data compiled by Bloomberg. He took the reins at Toyota in 2009, shortly after Elon Musk assumed his post at Tesla Inc.

During Toyota’s annual shareholders’ meeting in June, Toyoda alluded to steps the company was taking to find and develop potential successors. Anyone following in his footsteps must have “unshakable conviction on why Toyota exists" and a firm understanding of the company’s philosophy, he said, adding that his goal will be to “rejuvenate" management with the move.

Carmakers from Volkswagen AG to Ford Motor Co. are pivoting swiftly away from combustion engine-powered cars for the new and future lineups, with many betting on electrification as the way forward.

While Toyota is spending ¥4 trillion ($31 billion) to roll out 30 EV models by 2030, Toyoda earned a reputation as a contrarian on the future of the industry, saying he doubts consumers are ready for a wholesale shift at the pace some are projecting. That approach has been questioned by some, who see it as risking Toyota’s long-term position as the world’s dominant automaker. Others, however, see it as a prescient longer-term bet.

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This story has been published from a wire agency feed without modifications to the text.

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Published: 26 Jan 2023, 02:18 PM IST
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